The High Cost of Confidence

The confidence men were 15 minutes late to the Treasury's Cash Room yesterday, but this in no way diminished their self-assurance.

"We are a confident and optimistic people," Treasury Secretary Hank Paulson began. "Our confidence is born out of our long history of meeting every challenge we face."

"Americans can be confident that every resource is being brought to bear," added Fed Chairman Ben Bernanke, very much agreeing with his supremely confident president, who announced half an hour earlier in the Rose Garden that "the American people can have confidence about our long-term economic future."

The confidence men were joined in the Cash Room by confidence woman Sheila Bair of the FDIC, who contributed the sentiment that "the extraordinary steps we're taking today are intended to bolster public confidence."

This confidence-building exercise did not come cheap. The free marketeers of the Bush administration had just announced that they will use a quarter-trillion dollars to nationalize a good chunk of the banking system. It means the largest investor in the private sector is now the public sector.